books



previous page: The Theory And History Of Banking | by Charles F. Dunbar
  
page up: Banking Books
  
next page: The Romance And Tragedy Of Banking | by Thomas P. Kane

Modern Banking; Commercial And Credit Paper



A New, Authoritative, and Standard Reference Work in Five Parts Covering the Entire Field Relative to Modern Banking and Credit Practice; Bank Acceptances; Trade Acceptances; Commercial Banking and Credits; Banking Under the Federal Reserve; The Federal Reserve System with Amendments Rulings, Regulations, Opinions of Counsel on the Subjects of Bank and Trade Acceptances and Commercial Banking to 1920; American and Foreign Discount Markets; American and Foreign Credit Systems ; etc.. etc. Complete with Forms, Agreements, Records on the Subject of Acceptances, Commercial Banking and Credits; Dollar Credits for Financing Foreign Trade; Laws Relating to Negotiable Instruments, their Taxation; Digest of Bill of Lading Laws; U. S. Warehouse Laws and their Relation to Acceptances and Commercial Banking; Investments; Foreign Financing; etc., etc.

TitleModern Banking; Commercial And Credit Paper
AuthorFrederick Silver
PublisherThe Commercial and Financial Institute of America
Year1920
Copyright1920, The Commercial and Financial Institute of America
AmazonModern banking; Commercial and credit paper
Modern Banking; Commercial and Credit Paper
-Introduction
The plan in Part I of the book is to review, first, the simple procedure in banking and credits; their development; their relation to the subject of money, and to give an analysis of the meaning and u...
-Part I. Money, Banking And Credits
1. Money, Banking and Credits. 2. Banking in the United States before the Adoption of the Federal Reserve System. 3. Banking in the United States under the Federal Reserve System; its Principles and...
-Chapter I Money, Banking And Credits
Commerce in the primitive ages was carried on by the exchange of goods or commodities, otherwise known as barter, and without the use of money or credit. Since the time men first came into active cont...
-Credit. Definition of Credit
Credit may be broadly defined as the power to get goods in exchange for a promise or contract to deliver an equivalent at some future time. In other words, it is a promise to pay money in the future i...
-Confidence And Futurity Both Elements Of Credit
Credit is based upon confidence. Credit is also based upon futurity of payment. There is some difference of opinion as to whether confidence or futurity is the essential thing in credit and as to whet...
-Functions Of Credit
The most important service of credit is to facilitate the transfer of capital and thus to promote the production of wealth. Credit is not in itself either capital or wealth. It is a means to both. Wea...
-The Various Kinds Of Credit
The divisions of credit have been classified as follows: Public credit; capital credit; mercantile credit; individual or personal credit; and banking credit; which last named includes commercial credi...
-Banking
In our system of banking, there are at least three types of institutions distinguishable, the savings bank, the investment bank and the commercial bank. The organization of savings banks is along ent...
-The Investment Banker
The investment banker may be considered as a middleman pure and simple. To him are presented propositions of various natures pertaining to the financing of industries, commercial enterprises, railroad...
-Commercial Banks
Of the thirty thousand or more banks in the United States, twenty-eight thousand or so are known as commercial banks, and it may be said that it is upon the success or failure of their operations that...
-The Functions Of Commercial Credit
The business of commercial banks is said to be to lend or discount and to hold deposits. A third function may be combined with the above two, that is, the issuance of bank notes or the bank's own ...
-The Services And Functions Of A Bank
Banks are utilized most as places of security for the deposit of money. The business of banking arose from a desire on the part of merchants to obtain a place where they might with safety lodge their ...
-Chapter II. The American Banking And Credit System Before The Passage Of The Federal Reserve Act
Kinds Of Banking In The United States According to official figures there are in existence in this country some thirty thousand banks, all of which fall within either one of the following groups: 1....
-National Banks
Introduction of National Banking System; Purposes. - The original National Banking Act was framed in 1863, its establishment having been previously urged by various governmental officers, principally ...
-National Banks. Continued
Reserve Requirements Every national bank was required to keep, as reserve, an amount equal to from fifteen to twenty-five per cent, of its deposit liabilities, according to whether it was located in ...
-The Organization, Management And Supervision Of State Banks, Trust Companies, And Savings Institutions
Character Of Business State banks, like national banking institutions, conducted a general commercial banking business. The trust company differed from the ordinary State bank, in that it was granted...
-Private Bankers
Next in importance to State banks, trust companies and savings banks, came the private bankers. They were very numerous, exercising some influence among the alien population of their own race. Their o...
-The Commercial Paper Dealer And Broker
The other class of financial establishments directly supervised by the State was the commercial bill and paper broker, the services of which, in connection with commercial banking were of great import...
-The National Monetary Commission And The Aldrich-Vreeland Bill
As a result of the recommendations of the National Monetary Commission, there was presented before Congress the Aldrich-Vreeland Bill - Emergency Currency Act, which had the support of the business me...
-Chapter III. Banking In The United States Under The Federal Reserve System
Introduction of the System; Effect. - This new system of banking was introduced and accepted by a number of institutions throughout the country in the belief that its purposes would in the end prove t...
-Operations Of The Federal Reserve System
The Centralization And Mobilization Of District Bank Reserves Prior to the adoption of the Federal Reserve System, all national banks, as well as nearly all State institutions, were required to keep ...
-Inter-District Mobility
The mobilization of inter-district reserves is brought about by the three following means: First, by the rediscounting of one Federal Reserve bank for another of its commercial paper and other evidenc...
-The Trade Acceptance
To illustrate a trade acceptance, a seller of merchandise draws his draft upon the buyer, say, at ninety days sight, for the amount of the bill, and sends it along with the invoice of merchandise sold...
-The Bank Acceptance
We may now consider the bank acceptance, which is considered a still higher form of commercial paper. Ordinarily, the credit of the bank is considered to be higher than that of the commercial firm, wh...
-Intra-District Mobility Of Reserves
The same facilities for maintaining equilibrium in both reserves and discounts exist in the case of intra-district mobility as in that of inter-district mobility. In the former, the banks deal directl...
-The System of Credit Expansion Through Federal Reserve Notes
Issuance Of National Bank Notes By Banks The second form of credit circulation exists in the issuance of Federal Reserve bank notes. Before the adoption of the Federal Reserve System, the national ba...
-Collateral Loans
It so happens that member banks have at times, in their portfolios, large amounts of commercial paper and, at different times, find a need for money. However, as they are unwilling to part with their ...
-The Domestic Clearing System
Federal Reserve Banks As Clearing Houses For Members The Federal Reserve Act has established a domestic clearing system for the country. Under the Act, Federal Reserve banks are empowered to act as c...
-The Gold Settlement Fund
Operation Of Gold Settlement Fund The inter-district clearings of Federal Reserve banks are brought about by the Gold Settlement Fund. The provisions in the Act relating to this function of the sys...
-Financing Foreign Trade-Dollar Exchange
Dollar Exchange Provided For By Act The Federal Reserve Act has provided through its rediscount machinery expanded facilities for the financing of American foreign trade directly by dollar exchange, ...
-The Federal Reserve System And The Federal Treasury
Prior to the adoption of the Federal Reserve System, there was no mutuality between the national treasury and the national banks. Under the old system, the Government deposited its funds with thousand...
-Functions Of Federal Reserve System
An interesting account of the functions of the Reserve banks is contained in the First Annual Report of the Federal Reserve Board of December, 1914, quoted in part as follows: The question naturall...
-Chapter IV. Banking And Credits In Europe. The Banking And Credit Systems In England, France And Germany
Organization of the Banking Systems in England, France and Germany Introduction In order that we may learn by what methods the great European nations have developed their banking systems to their pr...
-The Development Of English Commerce And Finance
Early Stages Of Development England has always been known as a commercial power, and more so as a maritime power. In the early stages of English commerce, facilities afforded by English enterprise to...
-Banking And Credits In England. Bank Of England The Central Banking Institution
The Bank of England, founded in 1694, is the head and central figure of the English banking system, having the full support of the Government and receiving such support whenever it feels it necessary ...
-Bank And Trade Acceptances The Chief Forms Of Commercial Paper In England
Bank Acceptances Used Most Extensively The commonest forms of bills in England are those known as Bankers' Acceptances. It maybe said, by way of definition, that they are bills drawn by sellers of ...
-Other Classes Of Commercial Paper And Acceptances. The Documentary Bill Of Exchange
Bills Of Exchange A bill of exchange has been defined as an unconditional order in writing, addressed by one person (the drawer) to another (the drawee), signed by the drawer, and requiring the drawe...
-The Documentary Bill Of Exchange. Continued
Documentary Acceptance, And Documentary Payment Bills When drafts are deliverable only upon acceptance, the draft is known as a documentary acceptance bill; when deliverable only upon payment, the dr...
-The London Discount Market
In no city in the world has the business of discounting bills of exchange and acceptances been so thoroughly organized as in London. The business of discounting is regulated chiefly by the operations ...
-Watchfulness Of British Banks
British banks are vigilant of the discount operations carried on by each firm. Should they consider that the public is overtrading, they will cease buying bills, thus checking the tendency of credit o...
-The Banking And Credit System Of France
The Bank of France; creation. - The Bank of France, the organization of which dates back to the year 1800 is the central financial institution of the country and the head of the banking system. It was...
-The French Credit System
Services Of The Bank Of France The services of the Bank of France are most important in connection with the discount of bills of exchange, which form the basis of the French discount market. Here, th...
-Method In France
Superiority Of The Acceptance And Bill Of Exchange As in England, the open account is replaced by the bill of exchange or time draft, and to a large measure, in the three name paper denominated as a...
-The Banking And Credit System Of Germany
The German Reichbank; its operation. - The principle of centralized banking is much more developed in the case of Germany than in either England or France. The Reichbank operates through boards known ...
-The Use Of Acceptances In Germany
The Bank And Trade Acceptance In Germany, the bank acceptance is used more than the trade acceptance, as merchants prefer to draw on the bank of the buyer for acceptance or for payment rather than to...
-Method Of Financing German Trade
The German export merchant, in financing his foreign trade, selling on term credits, say, six months to maturity, and desiring to have funds made available to him immediately, so as not to tie up his ...
-Part II. Acceptances
Their Importance in the Fields of Domestic and International Trade and Commerce, and as a means of Creating Better Business and Credit Methods for the Country. An Extended Survey of the Acceptance, I...
-Chapter V. Historical Aspect Of The Acceptance - Its Use In Europe And In The United States
The Great War has indeed worked wonders in revolutionizing previous methods and customs adhered to by the people of this country for long periods of time, and has forced developments here and there, w...
-Bank And Trade Acceptances
Regulation P, above referred to, in series of 1915, here follows: Bills of Exchange Drawn Against Sales of Goods and Accepted by Purchasers Hereinafter Referred to as Trade Acceptances. I. Definit...
-Chapter VI. The American Credit System
An Analysis Of The Modes Of Transacting Business, And The Merits Of Each System The use of bills of exchange in the United States dates back to colonial times. They were devices employed by the State...
-Cash Discounts And Cash Settlement Of Bills
Following the Civil War, credits in the United States were of an uncertain kind. Interest rates rose high and merchants on the whole preferred to do business on a cash basis. The cash discount became ...
-The Cash Discount System And Its Drawbacks
From this system of cash discounts, arose a custom widely indulged in by buyers, who, preferring not to take advantage of the discount period offered them by sellers, deduct their discount in any even...
-The Open Account System
Another way in which American trade is generally carried on, and upon which basis most transactions are effected, is by the open account system, whereby the seller enters upon his books a debit agai...
-Single Name Paper
It has become customary in recent years for merchants, who have acquired a good credit standing, to sell their promissory notes to the public through brokers in commercial paper. These are largely pur...
-Single Name Paper Predominates
Of the classes of commercial paper in use at the present time in the United States, single name paper predominates. It is estimated by well informed commercial paper brokers that fully ninety percent ...
-Chapter VII. Procedure In The Use Of Acceptances
Nothing Strange In Acceptance Method There is nothing strange in the acceptance method-nothing in any way that differs from usual business customs. The users of the acceptance method forfeit no right...
-Trade Acceptance
Purpose Of Acceptance The purpose of the trade acceptance system is to supply a means for the settlement of accounts by trade acceptances and it is designed as a substitute for the open account in ...
-Trade Acceptance. Part 2
Drawing Of Trade Acceptance By Seller On Buyer The seller then draws his trade acceptance on the buyer, stipulating thereon that it arises from the sale of goods, and forwards it to the buyer togethe...
-Trade Acceptance. Part 3
Rediscounting Of Acceptances After the acceptance has been discounted with the bank or discount house, it may be held by the latter in its portfolio until maturity. It may, however, be rediscounted w...
-Trade Acceptance. Part 4
Discharge Of Acceptor Or Extension Of Time The acceptor either pays the draft at maturity or secures an extension of time. To secure an extension of time, it would be necessary for the acceptor, that...
-Chapter VIII. The Buyer And The Trade Acceptance
The Buyer Considered Notwithstanding the advantages to the seller and the banker as well as to general business through the employment of the acceptance method, it has been asked time and again by th...
-Acceptance Strengthens Credit Position Of Buyer In The Estimation Of His Business Associates
The trade acceptance improves the business standing and credit of the buyer in that it gives to the seller a negotiable evidence of indebtedness with a fixed maturity date. The buyer in this way puts ...
-Acceptance Strengthens Credit Position Of Buyer. Part 2
The Buyer As The Seller Buyers on the acceptance, in conserving their credit ability, and establishing their credit standing, are therefore enabled to employ it to a greater extent than money itself....
-Acceptance Strengthens Credit Position Of Buyer. Part 3
Acceptance Develops Sounder And More Serious Attitude Towards Buyer's Own Obligations Buyers frequently allow their accounts to accumulate to such an extent that they find themselves at times in a ve...
-Acceptance Strengthens Credit Position Of Buyer. Part 4
Buyer Benefited By The Extension Of Credit Under The Acceptance Method The buyer is able to extend his operations with greater facility through the acceptance than is possible under the open book acc...
-Chapter IX. The Seller And The Trade Acceptance
The following are a few advantages which the seller receives through the use of acceptances in substitution of the open book account. The Acceptance Provides A Liquid Asset What is of very great i...
-The Seller And The Trade Acceptance. Part 2
Acceptances Relieve Seller From Necessity Of Selling Or Assigning Open Book Accounts A general practice among business men who conduct their transactions under the open book account method, and who f...
-The Seller And The Trade Acceptance. Part 3
The Acceptance As A Means Of Gauging More Accurately The Credit Standing Of The Buyer The use of the acceptance enables the seller to gauge more accurately the credit standing and paying habits of th...
-The Seller And The Trade Acceptance. Part 4
Acceptance Enables Seller To Assist Customers By Extension Of Credit Without Obligation On Former Modern day transactions are based entirely upon credit. It has been estimated that ninety per cent, o...
-Chapter X. The Banker And The Trade Acceptance. The Duty Of The Banker
It is a matter of common knowledge that in periods of great prosperity, credits are apt to become over extended, both in amounts and as to length of time. This is due to the fact that in times of pros...
-The Duty Of The Banker. Part 2
Self Liquidity Of Trade Acceptances The banker, in lending money on single name paper has no concrete idea as to where the depositor is going to get the money to meet the note when due. In the disco...
-The Duty Of The Banker. Part 3
Assistance To Banks In Credit Matters Trade acceptances necessitate collections upon maturity, which work is invariably done by banks. Where they are generally used, bankers are in a position to keep...
-The Duty Of The Banker. Part 4
The Acceptance As A Basis Of A Liquid Currency It is to the bankers' great advantage that credit conditions always remain sound throughout the country, as this is the basis for sound finance. In our ...
-Chapter XI. The Consumer, The Retailer And The Trade Acceptance
The Financing Of Time Payment Sales In recent years, there has been developed a system of financing especially designed to assist the retailer and principally the consumer in time payment sales. Thi...
-The Consumer, The Retailer And The Trade Acceptance. Continued
Manufacturer Or Dealer Considered This is only one of many ways in which the acceptance may be employed. However looked upon, whether it benefits most the manufacturer, or the dealer, the consumer, o...
-Chapter XII. Miscellaneous Points Of Advantage To Users Of The Trade Acceptance Plan
Credit Investigation Always Necessary. Credit Of Parties To The Bill Should Always Be Investigated Proper investigation of the credit standing of the parties to the acceptance is just as necessary in...
-Chapter XIII. The Legal Phase Of The Acceptance
It has frequently been asked whether a trade acceptance payable at a certain bank operates in the same manner as does a check; that is to say, if a trade acceptance is presented at the bank where it i...
-The Negotiable Instruments Law And Its Relation To The Acceptance
The Negotiable Instruments Law which has been enacted in every State of the Union, except Georgia and Texas, contains a provision which clears up this conflict of authority by the enactment of the cla...
-A Review Of Practical Questions And Answers On The Trade Acceptance Method
(1) Q. What is meant by the trade acceptance system? A. By the trade acceptance system is meant the substitution of time drafts drawn by the seller on the buyer of merchandise at the time of sale, fo...
-Chapter XIV. Methods Of Introducing The Acceptance
Method of direct appeal; buyer must be shown, not forced. - The Institute has received many letters from firms engaged in nearly all lines of business, manufacturing, wholesaling and retailing, outlin...
-A Trade Acceptance
is an acknowledgment of a debt by the buyer in favor of the seller, for merchandise that the seller has placed in the hands of the buyer. The buyer agrees, in writing across the face of this acceptanc...
-Trade Acceptances For Better Business
The Trade Acceptance is a negotiable certificate of indebtedness arising out of a current transaction in merchandise. The Trade Acceptance covers the purchase price of the merchandise and is payable ...
-Methods Of A Brooklyn Bank
The First National Bank in Brooklyn is effectively promoting the use of trade acceptances through advertising. An advertisement recently published by it contained an illustration of the trade acceptan...
-Getting Your Money Before It Is Due
A trade acceptance saves the transmission of cash and enables the creditor not only to arrange the definite date of payment with the Commercial Banking and Credits debtor, but, if necessary, to sec...
-Chapter XV. Progress In The Acceptance Method
For And Against. Expressions And Opinions From the Leading Commercial and Financial Organizations, the Government, the Bankers and Specialists on the Acceptance Method Herewith are reviewed the opini...
-From Proponents Of The Acceptance Method
Paul M. Warburg, chairman of the Executive Committee of the American Acceptance Council, made the following statement of principles relative to trade acceptances at the first meeting of the Executive ...
-A Trade Acceptance Review
By Robert H. Bean Executive Secretary American Acceptance Council The elevation of acceptance credits to a position second only to cash is an accomplishment of the first year of the new era in Ameri...
-The Other Side Of The Question
In order to present both sides of the question on the use of trade acceptances, the following letter written by the assistant treasurer of a large manufacturing company in the United States is given. ...
-Chapter XVI. Importance Of The Acceptance To The National Interest
Modernization Of The Credit Structure The high quality of the bank and trade acceptance as commercial paper has induced the Federal Reserve Board to adopt and use it as a sort of special currency. Th...
-Chapter XVII. Bank Acceptances
There has previously been discussed the nature and functions of credit, particularly as they relate to commercial credit and its instruments. There have also been considered the various classes of cre...
-Bank Acceptances. Part 2
The Bank Acceptance Among the many radical changes in the mechanism of national and international finance which the war has brought about, few', if any, have been as important as the creation of the ...
-Bank Acceptances. Part 3
Acceptance Business Firmly Established In the course of time these merchants turned more and more to the business of lending their credit in the form of acceptances, not only at home, but to foreign ...
-Bank Acceptances. Part 4
The Bank Acceptance In America In the same manner in which both France and Germany patronized the acceptance facilities of England, so, under similar circumstances, until the establishment of the Fed...
-Chapter XVIII. Bank Acceptances
Definition Of Bank Acceptance A banker's acceptance is defined by the Federal Reserve Board as a bill of exchange of which the acceptor is a bank or trust company, or a firm, person, company, or cor...
-Bank Acceptance. Part 2
Bills Drawn To Furnish Dollar Exchange The fourth class of bankers' acceptances comprises bills drawn on member banks by banks and bankers in foreign countries, for the purpose of furnishing dollar e...
-Bank Acceptance. Part 3
General Character Of Eligible Instruments The Federal Reserve Board has determined that instruments themselves to be eligible for rediscount at a Federal Reserve Bank must meet the following requirem...
-Chapter XIX. Procedure Of Financing Imports Through Dollar Credits
Dollar Acceptances drawn on National Banks against imports are generally drawn against what is known as a Commercial Letter of Credit. A commercial credit is an undertaking on the part of the bank to ...
-Procedure Of Financing Imports Through Dollar Credits. Part 2
The Financing Of Imports Through Dollar Acceptances The dollar acceptance has established itself formally in the estimation of the American importer and exporter, and has taken a leading position in ...
-Financing Imports Through Dollar Credits. Part 3
Advantages Of Direct Service The American importer in this connection is able to spare himself from the contingencies frequently arising in connection with foreign shipments, such as short weights, l...
-Chapter XX. Procedure Of Financing Exports Through Dollar Acceptances
The procedure of financing exports through the medium of Dollar Acceptances differs somewhat from that of financing imports. Assume that a foreign buyer has bought goods in the United States. The Ame...
-Dollar Acceptances
a Against domestic shipment of goods, providing shipping documents conveying or securing title are attached at the time of acceptance. b Secured at the time of acceptance by warehouse receipt or ot...
-Chapter XXI. Acceptance Corporations Their Importance To The Development Of A Discount Market
What is regarded as most important to the development of an open discount market for the country is the so-called acceptance corporation. Prior to the passage of the Federal Reserve Act, the banking...
-Introduction Of The American Bankers' Acceptance
The Federal Reserve Act passed in 1914, gave the power to member banks of the system to accept drafts drawn upon them up to fifty per cent, of their capital and surplus, provided they were drawn in co...
-The Rise Of Acceptance Corporations
In 1916, an amendment was passed to the Federal Reserve Act, allowing member banks to invest up to ten per cent. of their capital and surplus in corporations organized to do a foreign or international...
-Creation Of New Acceptance Corporations
Since the amendment to the Federal Reserve Act permitting national banks to hold stock in such corporations, a very rapid development in the formation of acceptance corporations has been the result. A...
-Effect Of Call Loan System To Acceptance Growth
The most serious cause retarding the development of an open discount market for the country is as heretofore mentioned the call loan system. Most of the larger banks, because of the higher yield from ...
-Chapter XXII. The Development Of An Open Discount Market
The Importance of Acceptances and High Grade Commercial Paper to the Maintenance of a System, Which More Than Anything Else, Furnishes a Basis for Establishing the National Ideal of a Liquid Currency ...
-The Development Of An Open Discount Market. Part 2
Discount Market Makes Mobility Possible We have seen also that by the introduction of the Federal Reserve System, the reserves of the country were made capable of transfer from one part to another ac...
-The Development Of An Open Discount Market. Part 3
The Discount Market As A Stabilizer Of Interest Rate Levels Within The Country It is a proven fact that interest rates in the United States fluctuate on a much wider scale than in European countries....
-The Development Of An Open Discount Market. Part 4
Essential Features Of A Broad Discount Market The factors necessary to the maintenance of a broad discount market may be analyzed as follows: 1. Those creating the acceptances, or the accepting bank...
-Acceptances As A Secondary Reserve
In addition to its cash, a bank's resources should be in the form of some liquid readily saleable investments as a secondary reserve, and it is here that the acceptance can best play its part. Of cour...
-The American Discount Market And Its Development
The acceptance business in the United States had its actual beginning shortly after the outbreak of the European War. Owing to changed conditions which the great war brought with it, a few large banks...
-The Discount Market As It Exists To-Day
Though still in its infancy, but making great progress, the acceptance has yet to overcome great difficulties. An important factor to be considered restricting its use is found in legislative restrict...
-Chapter XXIII. Acceptances As Investments
Acceptance A New Form Of Short Term Investment Heretofore we have confined our expressions on the trade and bank acceptance in connection with their usefulness, importance and application to commerci...
-Acceptances As Investments. Part 2
Other Methods Of Dealing In Commercial Paper Though the commercial paper broker is considered of great importance in the proper distribution of acceptances, where his services in bringing buyer and s...
-Acceptances As Investments. Part 3
Other Factors In The Acceptance Investment Business The progress in the development of the acceptance business as an item of investment has brought into existence numerous commercial paper dealers an...
-Chapter XXIV. Conclusion
The Need For Wholehearted Co-Operation In the course of the development of the acceptance in this country, as in the development of other worthy purposes, difficult tasks invariably arise, not becaus...
-Conclusion. Continued
Business Men Must Co-Operate There are still today great numbers of American businessmen who are uninformed concerning the details of the trade acceptance method, and therefore, unconvinced as to its...
-Part III. Commercial Banking Practice And Acceptances Under The Federal Reserve System
Giving the Rulings, Regulations, Opinions of Counsel, General Statutory Provisions, and Amendments to 1920, in Connection with Commercial Banking Practice Under the Federal Reserve System; an Authorit...
-Acceptances Arising Out Of A Transaction Involving The Importation Or Exportation Of Goods
Example of an importation acceptance; Procedure; - Let us assume that an importer is desirous of purchasing a quantity of manila hemp. He advises his bank regarding the particulars of the transaction,...
-Acceptances Arising Out Of Transactions Involving The Domestic Shipment Of Goods
Procedure in the case of domestic transactions is very much similar to those involving the exportation or importation of goods. As an example, let us take the case of a manufacturer who desires to fi...
-Acceptances Secured By Readily Marketable Goods In Warehouse
As a further example of this class of acceptance, let us take the case of a clothing manufacturer who desires to carry a stock of silks by means of the banker's acceptance. He places the merchandise i...
-Section I. Acceptances Based Upon Transactions Involving The Exportation Or Importation Of Goods. General Statutory Provisions
Use Of Acceptances In Foreign Trade Any member bank is permitted to accept drafts or bills of exchange which grow out of transactions involving the exportation or importation of goods. Relating To...
-Acceptances Based Upon Transactions Involving The Exportation Or Importation Of Goods. General Statutory Provisions. Continued
Acceptance At The Instance Of Exporter If a drawee bank accepts at the instance of the purchaser of goods, the purchaser having a contract to export such goods, the draft would grow out of a transact...
-Maturity Relating To Bank Acceptances Based On Imports And Exports. General Statutory Provisions
Period Of Maturity Acceptances of member banks against imports and exports are limited to drafts having not more than six months' sight to run, exclusive of days of grace. Relating to Maturity of ...
-Amount Bank May Accept For One Interest
General Statutory Provisions in Connection With the Above Relating to Bank Acceptances Based on Imports and Exports Limitation of amount; exception. - No member bank is permitted to accept, whether i...
-Relating To Amount Bank May Accept For One Interest On Transactions Involving Exports And Imports
Secured bills; accepting bank must remain secured. - The ten per cent limit upon the amount of acceptances which any member bank might make for one person, firm, company, or corporation, does not appl...
-Aggregate Amount Bank May Accept
General Statutory Provisions in Connection With the Above Relating to Transactions Based on the Importation or Exportation of Goods Limitation of amount fifty per cent - No bank is permitted to accep...
-Bank Acceptances Executed To Furnish Dollar Exchange
Acceptances Executed To Furnish Dollar Exchange Any member bank may accept drafts or bills of exchange drawn upon it having not more than three months' sight to run, exclusive of days of grace, drawn...
-Announcements Of The Federal Reserve Board
The purpose of this Act and the regulations made pursuant thereto was to enable the American banks to provide dollar exchange in countries where the check is not the current means of remittance in pay...
-Maturity In Connection With Bank Acceptances Executed To Furnish Dollar Exchange
Period Of Maturity Member banks may accept drafts drawn to furnish dollar exchange having not more than three months' sight to run, exclusive of days of grace. Amount Acceptable By One Member Bank...
-Bank Acceptances Based On Domestic Shipments Of Goods
Bank Acceptances In Domestic Trade Any member bank may accept drafts drawn upon it which grow out of transactions involving the domestic shipments of goods provided shipping documents conveying or se...
-Maturity In Connection With Bank Acceptances Based On Domestic Shipments Of Goods
General Statutory Provisions Period Of Maturity Any member bank may accept such drafts drawn upon it having not more than six months' sight to run, exclusive of days of grace. In Connection with ...
-Bank Acceptances Secured By Warehouse Receipts
General Statutory Provisions Acceptances By Member Banks Any member bank may accept drafts or bills of exchange drawn upon it which are secured at the time of acceptance by a warehouse receipt or ...
-Eligible Security
Warehouse Receipts Required To Be Issued By Warehouses Independent Of Borrower Warehouse receipts offered as security for bills accepted by member banks must be issued by warehouses which are indepen...
-Ineligible Security
Chattel Mortgages Drafts or bills of exchange drawn in domestic transactions against a national bank cannot be accepted when secured by a chattel mortgage on cattle, but only when accompanied by ship...
-Substitution of Warehouse Receipts
Substitution It is held that there is no objection to permitting mills to substitute other warehouse receipts for cotton receipts during the life of an acceptance. Maturity (For maturity see Bank ...
-Purchase by National Bank of Its Own Acceptances
Bank Permitted To Purchase Its Own Acceptances A member bank may legally purchase its own acceptances, but such a transaction is equivalent to a loan or advance to the customer for which the acceptan...
-Syndicate Acceptance Credits
Policy Of Federal Reserve Board The Federal Reserve Board has issued a memorandum stating its policy in dealing with acceptances drawn under credits extending over a period of one or two years, which...
-Section II. Open Market Transactions In Acceptances, Bills Of Exchange And Cable Transfers
General Statutory Provisions Cable Transfers, Bank Acceptances And Bills Of Exchange Any Federal Reserve bank may, under rules and regulations prescribed by the Federal Reserve Board, purchase and...
-General Regulations And Rulings Relating to Open Market Transactions
Conditions Governing Eligibility The Federal Reserve Board, exercising its statutory right to regulate the purchase of bills of exchange and acceptances, has determined that a bill of exchange or acc...
-Transactions In Bank Acceptances In The Open Market
Definition Of Bankers' Acceptances A banker's acceptance is a bill of exchange, of which the acceptor is a bank or trust company, or a firm, person, company, or corporation, engaged in the business o...
-Ineligible Bank Acceptances
Opinions of Council and Rulings Acceptances Not Based On Sales And Not Secured, Ineligible Acceptances which are drawn by a manufacturer and accepted by a trust company, not a member of the Federa...
-Evidence Of Eligibility And Requirement Of Statements
Regulations of the Federal Reserve Board Evidence of eligibility; exception of bills accepted by national banks. A Federal Reserve bank must be satisfied either by reference to the acceptance itself,...
-Maturity
General Statutory Provisions Maturity Any Federal Reserve bank may purchase and sell cable transfers and bankers' acceptances of the kinds and maturities made eligible for rediscount by the Federa...
-Eligible Bills And Trade Acceptances General Statutory Provisions
Eligible Bills Any Federal Reserve bank may purchase and sell in the open market bills of exchange of the kinds and maturities made eligible for rediscount by the Federal Reserve Act. (See Regulation...
-Ineligible Bills And Trade Acceptances Regulations of Federal Reserve Board
Finance Paper To be eligible for purchase by Federal Reserve banks, a bill of exchange or acceptance must not have been issued for carrying on trading in stocks, bonds, or other investment securities...
-Section III. Commercial Banking And Credits
Advances By Federal Reserve Banks i. General Statutory Provisions. 2. Security. 3. Maturity. General Statutory Provisions Maturity; security; eligible paper; U. S. obligations. - Any Federal Reser...
-Section IV. Commercial Banking And Credits
Rediscounts With Federal Reserve Banks of Acceptances, Notes and Bills of Exchange General Statutory Provisions Rediscount Of Notes, Drafts, Bills Of Exchange, Commercial, Agricultural And Commodi...
-Rediscount Of Promissory Notes
Definition Of Promissory Note A promissory note is defined as an unconditional promise, in writing, signed by the maker, to pay, in the United States, at a fixed or determinable future time, a sum ce...
-Rediscount Of Promissory Notes. Part 2
Discount Of Renewal Notes In an informal ruling of the Federal Reserve Board, the following is mentioned in connection with the discount of renewal notes: Self-liquidating paper, even though the tran...
-Rediscount Of Promissory Notes. Part 3
Notes Based On United States Obligations A Federal Reserve bank may discount a note, draft, or bill of exchange, indorsed by a member bank, which is issued or drawn for the purpose of carrying on tra...
-Rediscount Of Promissory Notes. Part 4
Discount Of Renewal Notes Banks should not enter into an agreement for renewal. Banking judgment is necessary in determining the merits of each renewal. Those providing working capital or to finance ...
-Bills Payable With Collection Charges
Exchange And Collection Charges Distinguished A bill made payable with collection charges is not a negotiable instrument, though the negotiable instruments law provides that an instrument payable wit...
-Bills Payable With Collection Charges. Part 2
Commercial, Agricultural And Live Stock Paper Notes, drafts, and bills admitted to discount under terms of this paragraph must have a maturity at the time of discount of not more than ninety days, ex...
-Bills Payable With Collection Charges. Part 3
Limitation Of Rediscounts For Member State Banks No Federal Reserve bank shall be permitted to discount for any member State bank or trust company, notes, drafts, or bills of exchange of any one borr...
-Aggregate Amount Rediscountable For One Bank
General Statutory Provisions Indebtedness Of National Bank No national banking association shall at any time be indebted, or in any way liable, in an amount exceeding the amount of its capital sto...
-Indorsement Of Member Banks In Connection With Rediscount of Promissory Notes
General Statutory Provisions Indorsement Any Federal Reserve bank may discount notes, drafts, and bills of exchange upon the indorsement of any of its member banks, which shall be deemed a waiver ...
-Rediscount of Promissory Notes. Continued
Definition Of Draft Or Bill Of Exchange A draft or bill of exchange is an unconditional order in writing, addressed by one person to another, other than a banker, signed by the person giving it, requ...
-Section V. Trade Acceptances
Regulations of the Federal Reserve Board Definition A trade acceptance is defined in simple terms as a draft or bill of exchange drawn by the seller on the purchaser of goods sold, and accepted by...
-Section V. Trade Acceptances. Part 2
Bills Based On Sale And Delivery Of Gas An acceptance drawn by a gas producing company or a gas distributing company and accepted by the latter in payment for gas sold and delivered is a trade accept...
-Section V. Trade Acceptances. Part 3
Security Paper Ineligible Notes, drafts or bills covering merely investments or issued or drawn for the purpose of carrying on trading in stocks, bonds or other investment securities, except bonds or...
-Section V. Trade Acceptances. Part 4
Commercial, Agricultural Or Live Stock Paper Notes, drafts or bills admitted to rediscount must have a maturity at the time of not more than ninety days, exclusive of days of grace, provided that suc...
-Section V. Trade Acceptances. Part 5
Drafts Discounted Before Acceptance A bill of exchange discounted before acceptance may be said to be drawn against actually existing values, when and only when it is accompanied by shipping document...
-Section V. Trade Acceptances. Part 6
What Live Stock Includes The term live stock is held to include not only beef cattle, but also horses and mules. Notes Of Cattle Dealers Merely Mercantile Notes made by mule and cattle dealers ...
-Section V. Trade Acceptances. Part 7
Cattle For Breeding, Grazing Or Fattening Loans on cattle, which are used for breeding, grazing or fattening, may be made under the classification of six months' agricultural paper, and the paper may...
-Section V. Trade Acceptances. Part 8
Amount Of Paper Rediscountable Left With Discretion Of Federal Reserve Board Notes, drafts and bills of exchange, drawn or issued for agricultural purposes or based on live stock, and having a maturi...
-Eligible Commodity Paper
General Statutory Provisions What Constitutes Eligibility Notes, drafts and bills of exchange secured by staple agricultural products, or other goods, wares, or merchandise, are eligible commodity...
-Eligible Commodity Paper. Continued
Conditions Governing Negotiability A bill of exchange, in order to be negotiable, must be an unconditional order to pay, on demand, or at a fixed or determinable future time, a certain sum of money, ...
-Ineligible Bank Acceptance
Opinions of Counsel and Rulings Chattel Mortgages Ineligible Federal Reserve banks are directed to consider as ineligible bills drawn against the security of chattel mortgages on cattle and the li...
-Ineligible Bank Acceptances. Continued
Readily Marketable Staples Any member bank may accept drafts which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily ma...
-Section VI. Acceptances As An Investment
Prime bank acceptances are especially desirable as an investment because they combine in a degree not found in any other commercial instrument the three important factors of safety, short maturity, an...
-Part IV. Bank And Trade Acceptances Commercial Banking And Credits Forms, Agreements, Records, Etc
Forms, Agreements, Records, Etc. Form No. 1. Form of Trade Acceptance for General Use, Based on Domestic Sales of Merchandise. No. 2. Form of Trade Acceptance Based on Domestic Sales of Merchandise, ...
-Forms Of Trade Acceptance
The following forms of trade acceptances are given for the convenience of commercial and financial houses, from which a choice may be made of a particular form which is best adapted to their use. The ...
-Form No. 11 Banker's Acceptance
Specimen Bill Drawn Locally Specimen Bill Drawn Locally Explanation - Form No. 11. Form of Bank Acceptance - Specimen Bill Drawn Locally As will be seen from an examination of the particulars c...
-Form No. 12 Bank Acceptance Arising out of a Foreign Transaction
Specimen Bill Drawn In Foreign Country Specimen Bill Drawn in a Foreign Country Bank Acceptance - Specimen Bill Drawn in Foreign Country This form differs from form No. 11 only in that the drawe...
-Bank Acceptance Arising out of a Transaction Involving the Domestic Shipment of Goods
This bank acceptance differs from No. 14 only in the form of certificate indicating its origin. In No. 14, the bank acceptance is based upon a transaction or transactions involving the importation ...
-Form No. 18 Acceptance Agreement
Used in Connection with Acceptance Credits Granted by a Bank for the Purpose of Financing Imports or Exports to or from the United States, or Merchandise Stored in Warehouses in the United States or A...
-Form No. 19 Trust Receipt Used in Connection With Acceptance Credits
Received from the .............. Trust Company/Bank, hereinafter called the Trust Company/Bank, the following goods and merchandise, their property specified in warehouse receipt/bill of lading. .......
-Form No. 21 Trust Receipt
(Documents For Warehousing) Received from The Guaranty Trust Co. of New York Bill of Lading per................dated........................for the following goods and merchandise, their property, m...
-Form No. 22 Trust Receipt for Withdrawal of Collaterals
Trust Receipt for Withdrawal of Collaterals Loan of................ New York,......................... Received from Guaranty Trust Co. of New York, the following property held by the Guaranty Trust...
-Part V Bank And Trade Acceptances Commercial Banking And Credits Laws
The Negotiable Instruments Law, Digest of the Federal Bill of Lading Law, The United States Warehouse Act, Laws Relating to the Taxation of Negotiable Instruments, Checks, Drafts, Bank and Trade Accep...
-Article I. General Provisions
1. Short title. 2. Definitions and meaning of term 3. Person primarily liable on instrument. 4. Reasonable time, what constitutes 5. Time, how computed; when last day...
-Article II. Form And Interpretation
20. Form of negotiable instrument. 21. Certainty as to sum; what constitutes. 22. When promise is unconditional. 23. Determinable future time; what constitutes. 24. A...
-Article III. Consideration Of Negotiable Instruments
50. Presumption of consideration. 51. What constitutes consideration. 52. What constitutes holder for value. 53. When lien on instrument constitutes holder for value ...
-Article IV. Negotiation
60. What constitutes negotiation. 61. Indorsement; how made. 62. Indorsement must be of entire instrument. 63. Kinds of indorsement. 64. Special indorsement; indorsem...
-Article V. Rights Of Holder
90. Right of holder to sue; payment. 91. What constitutes a holder in due course. 92. When person not deemed holder in due course. 93. Notice before full amount paid. ...
-Article VI. Liability Of Parties
110. Liability of maker. 111. Liability of drawer. 112. Liability of acceptor. 113. When person deemed indorser. 114. Liability of irregular indorser. 115. War...
-Article VII. Presentment For Payment
130. Effect of want of demand on principal debtor. 131. Presentment where instrument is not payable on demand. 132. What constitutes a sufficient presentment 133. Place of pres...
-Article VIII. Notice Of Dishonor
160. To whom notice of dishonor must be given. 161. By whom given. 162. Notice given by agent. 163. Effect of notice given on behalf of holder. 164. Effect where noti...
-Article IX. Discharge Of Negotiable Instruments
200. Instrument; how discharged. 201. When person secondarily liable on, discharged. 202. Right of party who discharges instrument. 203. Renunciation by holder. 204. ...
-Article X. Bills Of Exchange; Form And Interpretation
210. Bill of exchange defined. 211. Bill not an assignment of funds in hands of drawee. 212. Bill addressed to more than one drawee. 213. Inland and foreign bills of ...
-Article XI Acceptance Of Bills Of Exchange
220. Acceptance, how made, et cetera. 221. Holder entitled to acceptance on face of bill. 222. Acceptance by separate instrument. 223. Promise to accept; when equivalent to ...
-Article XII. Presentment Of Bills Of Exchange For Acceptance
240. When presentment for acceptance must be made. 241. When failure to present releases drawer and indorser. 242. Presentment; how made. 243. On what days presentment may ...
-Article XIII. Protest Of Bills Of Exchange
260. In what cases protest necessary. 261. Protest; how made. 262. Protest; by whom made. 263. Protest; when to be made. 264. Protest; where made. 265. ...
-Article XIV. Acceptance Of Bills Of Exchange For Honor
280. When bill may be accepted for honor. 281. Acceptance for honor; how made. 282. When deemed to be an acceptance for honor of the drawer. 283. Liability of acceptor for ...
-Article XV. Payment Of Bills Of Exchange For Honor
300. Who may make payment for honor. 301. Payment for honor; how made. 302. Declaration before payment for honor. 303. Preference of parties offering to pay for honor. &...
-Article XVI. Bills In A Set
310. Bills in sets constitute one bill. 311. Rights of holders where different parts are negotiated. 312. Liability of holder who indorses two or more parts of a set to different ...
-Article XVII. Promissory Notes And Checks
320. Promissory note defined. 321. Check defined. 322. Within what time a check must be presented. 323. Certification of check; effect of. 324. Effect where holder ...
-Article XVIII. Notes Given For Patent Rights And For A Speculative Consideration
This Article appears only in New York and Ohio Acts 330. Negotiable instruments given for patent rights. 331. Negotiable instruments given for a speculative consideration. 332. Ho...
-United States Warehouse Act
The United States Warehouse Act and its Importance to the Bank Acceptance The United States Warehouse Act is given here in full as a reference aid to the treatise on Acceptances. Since Bank Acceptanc...
-Stamp Taxes. Taxation Of Checks, Acceptances, Drafts And Promissory Notes
Taxation of Negotiable Instruments; Checks, Drafts, Promissory Notes, and Acceptances Trade and Bank Acceptances, being in the same class as other negotiable instruments, are subject to the same laws...
-Stamp Taxes. Part 2
Government And Municipal Obligations Exempted Instruments Exempt There shall not be taxed under this title any bond, note or other instrument, issued by the United States, or by any foreign Governmen...
-Stamp Taxes. Part 3
Use Of Cancelled Stamps - Refunds A stamp once having been affixed to an instrument and cancelled cannot lawfully be removed and attached to another instrument. Refund will be made by the collector o...
-Foreign Financing Under The Edge Act Laws And Synopsis Foreign Financing Under The Edge Act
Since the termination of the great war, our international commerce, which had been built up at a tremendous cost, has been threatened by new conditions seriously affecting its progress. The danger co...
-The Edge Act
For Foreign Financing Approved December 24, 1919 An Act To amend the Act approved December 23, 1913, known as the Federal Reserve Act BE it enacted by the Senate and House of Representatives of the U...
-Corporate Functions
Organization formalities; directors must be citizens. - The persons signing the organization certificate shall duly acknowledge the execution thereof before a judge of some court of record or notary ...
-Power to Purchase and Hold Stock
Stock of other corporations; limit to holding. - (c) With the consent of the Federal Reserve Board to purchase and hold stock or other certificates of ownership in any other corporation organized und...
-Price Fixing
No corporation organized under this section shall engage in commerce or trade in commodities except as specifically provided in this section, nor shall it either directly or indirectly control or fix...
-American Ownership
Directors, Officers, Etc A majority of the shares of the capital stock of any such corporation shall at all times be held and owned by citizens of the United States, by corporations the controlling ...
-Directors
Reserve Board Members No member of the Federal Reserve Board shall be an officer or director of any corporation organized under the provisions of this section, or of any corporation engaged in a sim...
-Dissolution
Liability of Stockholders, Officers and Directors Shareholders in any corporation organized under the provisions of this section shall be liable for the amount of their unpaid stock subscriptions. N...
-Forfeiture of Franchise
Violation Of Law Should any corporation organized hereunder violate or fail to comply with any of the provisions of this section, all of its rights, privileges, and franchises derived herefrom may t...
-Insolvency and Receivership
Whenever the Federal Reserve Board shall become satisfied of the insolvency of any such corporation, it may appoint a receiver who shall take possession of all of the property and assets of the corpo...
-Finances
Annual meetings; reports and examinations. - Every corporation organized under the provisions of this section shall hold a meeting of its stockholders annually upon a date fixed in its by-laws, such ...
-Embezzlement - Penalties
False entries; penalties for abuses. - Every officer, director, clerk, employee, or agent of any corporation organized under this section who embezzles, abstracts, or wilfully misapplies any of the m...









TOP
previous page: The Theory And History Of Banking | by Charles F. Dunbar
  
page up: Banking Books
  
next page: The Romance And Tragedy Of Banking | by Thomas P. Kane